Believe it or not, but we are almost three months away from the end of another year. During the next three months, why not spend some time reviewing your documents to see if you have the adequate information on file to issue the year-end 1099’s. Sometimes January can be a very hectic month with the end of the year tax reporting requirements. But who knows, maybe with a little planning this January will be a little less hectic.
The necessary information that you will want to be sure that you have on file is the company/individual name, address and either a Federal Identification Number or Social Security Number. The taxpayer’s identification number is the most import item as you probably already have their address on file. To obtain this information, the IRS has a Form W-9 which is used to request the taxpayer’s identification number from an individual or company. The best time to obtain this information is before the work has even begun. If the work has already been completed, then you will need to write a letter to the independent contractor requesting them to complete the enclosed Form W-9 and return back to your company. The Form W-9 can be found on the IRS website at http://www.irs.gov/pub/irs-pdf/fw9.pdf
By going thru your files ahead of time, this will prevent any last minute scrabbling to obtain the necessary information to prepare an accurate return.
posted by Diana Dials